When we hear the word “condominium” or “condo” we typically think of a place to stay while on vacation or an apartment-style home in a densely-populated urban area. However, the condominium form of ownership can be a very useful tool for businesses including individual doctors and physician practices. Various types of practices and specialties naturally complement one another and, as a result, can mutually benefit from being physically located near each other in situations where the individual doctors do not belong to the same practice group or do not want to go into actual business together or own real estate together. For example, an orthodontist and a pediatric dentist may desire to be located in the same building, but each wants to own his own real estate rather than owning it as joint tenants or through a corporation or other entity. This is a situation where the condominium form of ownership can create an opportunity for these doctors.
What is often referred to as a “condo” is legally defined as a “unit.” The owner of a unit is the fee simple owner of that unit and is an owner in common (along with the other unit owners) of the common elements of the condominium. There is great flexibility in how the developer of a condominium (i.e. the physicians involved in creating the condominium) can structure what is classified as “unit” and what is classified as the common elements. For example, if an orthodontist and a pediatric dentist identify a two-story building where they would like to locate their practices, each doctor can own one floor of the building while the roof and skin of the building can be defined in the declaration of condominium as common elements. Maintenance, replacement, and repair costs could be shared equally or in a pro rata amount based on square footage of the units owned by the two physicians.
Originally Published in Alabama MD - January 24, 2014.
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